Contractors' Questions: How to claim old expenses?
Contractor's Question: I have a significant amount of billable expenses which I have never approached a former client to pay. These date back to 2007 & 2008, when I worked on behalf of the client company, a large multinational. As I'm facing financial difficulties, I would like to know if there's a limit on how far back I can claim payment for legitimate expenses. If not, how do I go about recouping the owed monies, from an accounting standpoint?
Expert's Answer: I can advise only as an accountant, not a lawyer. But it seems that if you, the contractor, has an agreement that the client will meet the costs of expenses then, although these expenses are old, they should be honoured - as long as you can provide the supporting receipts.
There may be a clause in that agreement that has a time limit to invoice costs to the client, so you would need to check this. If it is clear that expenses are time-sensitive, then you may find it difficult to collect your money.
A commercially acceptable response would be for you to contact the client and discuss the position with them to ensure the invoice will be paid. That said, most large organisations would require a Purchase Order before administering payment, so be prepared that you may have to contact your former work contacts at the client company to obtain this and have it universally approved.
In short, however, you should not be afraid of asking for monies that are owed for work you've already completed, and moved on from, as you have nothing to lose.
The expert was John Lyon, managing director of contractor accountancy firm Independent Contractor Services.